Why my first startup failed.
And why it didn't.

December 31, 2017

Note: All my thoughts here are my own. While I would like to think my co-founders would agree with me, they are entitled to their own opinions about our journey together.

As tomorrow is the first day of 2018, I thought it was appropriate to kick off the new year by sharing the biggest lessons I've learned in 2017, beginning with some of the toughest challenges of my life. Launching a startup was my dream, so what happens when it doesn't work out?

We launched our startup to make the college donation process better. 
That's where it all began. We thought to ourselves "donating to college sucks!" and we wanted to figure out why and make it better. I won't go into what the product was, or the features we chose to build, because this isn't a pitch. Instead, let's focus on what you rarely read about in your daily newsfeeds or hear about from all your friends in startups. Let's talk about our mistakes and what we learned from them. Let's talk about why we failed.

Mistake #1: We didn't move fast enough.
Looking back on our startup journey, while we got many things wrong, we also got many things right. We found a problem we were obsessed with solving, we raised some money, we built a product, we learned from our users, and we set goals to measure our success. On top of that, we were launching a fundraising startup on the heels of a hot fundraising market (right around the time kickstarter and gofundme were hitting every device on the planet). So where did we go wrong, even when we were right? We moved too damn slow. It took us a year to acknowledge we should raise our first round, and once we had secured funding, another 6 months to build version 1 of our product. That should have taken us 1/3 the time. In that time, our users had lost their excitement for our product, the market began to cool down, competitors began disappearing, investors became skeptical, and our funds were depleting and we became straight-up broke. So what's the lesson here? Startups have less of everything. Less money, less people, less time, and less resources. The only thing they can do is move faster than everyone else. So make sure you're moving faster than everyone else on the planet to get users, customers, funding, data, and revenue. MOVE FAST AF.

Mistake #2: We chose the wrong business model for our market.
By our second year we had learned that college alumni love giving back to student clubs and organizations. And of course, student clubs and organizations rarely have a ton of funding. So we thought, why involve the college administration at all if we don't have to? Let's let alumni donate to the clubs directly and take a simple transaction fee. Alumni don't have to interact with the college if they don't want to, it's not like colleges are making anything easier than we are, otherwise why would you use our product? But after we got dozens of student clubs using it, one-by-one every student user began to get "too busy" to use it or simply disappeared from our user-base. Now this was interesting, why wouldn't they want to fundraise? We did know that alumni loved donating to the organizations, but it seemed the students themselves needed a fundraising structure that would be enforced. Not because they wanted someone telling them what to do, but because they needed someone telling them what to do. I mean they are students after all. Turns out, we should have just sold our product to colleges directly rather than trying to cut them out. Colleges could distribute it to every student organization, enforce the use of it, and pay a bigger check for the licensing than we could ever get from a transaction fee. Of course, we did eventually figure out we were probably using the wrong business model, so why didn't we pivot? See mistake #1.

Mistake #3: The wrong people for our business.
Ultimately, this is the biggest mistake in my own opinion. And it all comes down to our team, including myself. We were attempting to build a fundraising technology business and we knew exactly how to build a product, and no idea how to build a business. We might have made every first-time-founder mistake in the book. We spent no time or money on marketing or public relations. We had nobody with marketing or sales expertise on the team. I mean we were marketing to college students, arguable the most active social media users on the planet, and we didn't even have social media accounts until our second year.  We rarely pitched to investors and by the time we really started to fundraise, we were already out of money (never-ever do that). We spent almost all of our dollars on engineering and nothing else. For every skill we realized we lacked, we should have recruited someone, or paid someone, to fill in the gap and push the business forward. Ultimately, we weren't the right people to solve the problem - at least not on our own.